This action might not be possible to undo. Are you sure you want to continue?
A Historical Perspective An Interisle White Paper
Prepared by: Interisle Consulting Group, LLC 39 S Russell Street Boston, MA 02114 http://www.interisle.net Lyman Chapin +1 617 686 2527 email@example.com Chris Owens +1 617 413 3734 firstname.lastname@example.org
ISP Peering and Interconnection
About this Report
Studies of Internet Service Provider (ISP) interconnection arrangements have been performed from many different perspectives, including the technical architecture of exchange points, the business and economic models that underlie peering and transit agreements, and the interaction between market-driven interconnection arrangements and public policy (at both the national and international levels). These studies have been extensively reported and analyzed (see Sources and References). This report is intended to provide an historical context for, and concise summary of, the evolution of ISP interconnection—how it originated, how it developed, and how it is practiced today—without exhaustively reiterating information that is available from other sources. The goal of this report is to describe the way in which the self-organized and selfregulating structures that govern today’s global Internet—including the arrangements that enable ISPs to connect their networks to each other—have evolved naturally, over a period of roughly 35 years, according to principles that are deeply embedded in the Internet architecture. These structures are selforganized and self-regulating not because the Internet is an anachronistic “untamed and lawless wild west” environment, but because years of experience have shown that self-management is the most effective and efficient way to preserve and extend the uniquely valuable properties of the Internet. Following an introduction to ISP interconnection in section 1, section 2 of this report describes the way in which today’s model of ISP interconnection has evolved over the past 35 years in parallel with the evolution of the Internet architecture. Section 3 describes the economics and management structures that have emerged from that process to govern today’s Internet. Section 4 identifies new challenges that have emerged since the turn of the century to the traditional arguments for and against the regulation of ISP interconnection. Section 5 summarizes the conclusions of the report. Section 6 contains a list of sources and references.
Copyright © 2005 Interisle Consulting Group, LLC. All Rights Reserved
S. Mr. representative to the networking panel of the NATO Science Committee. Mr. which (as Bolt.S. and is the co-author of Open Systems Networking—TCP/IP and OSI. Beranek and Newman) developed the hardware and software for the first ARPAnet nodes installed in 1969. Mr. which became one of the first commercial Internet Service Providers (BBN Planet) in 1993. and was separately incorporated in 2000 as Genuity. and the U. standards area director for the Internet Engineering Steering Group (IESG). and policy framework that support today’s globally pervasive Internet. LLC. co-founder and trustee of the Internet Society (ISOC). Chapin has served as the chairman of the Internet Architecture Board (IAB). and international standards committees responsible for network and transport layer architecture. and U.ISP Peering and Interconnection Page 2 About the Author Lyman Chapin has actively contributed to the development and evolution of the technologies and self-governance structures of what is now the Internet since 1977. acquired two other regional networks (BARRnet and SURAnet). service. Chapin was Chief Scientist at BBN Technologies.interisle. U. All Rights Reserved www. Before co-founding Interisle Consulting Group.net . protocols. Chapin has also served as a Director of the Internet Corporation for Assigned Names and Numbers (ICANN). and protocol standards. Copyright © 2005 Interisle Consulting Group. and during almost three decades of international technical and diplomatic leadership has played a key role in the development of the network routing and interconnection architecture. He was a principal architect of the Open Systems Interconnection (OSI) reference model and protocols. BBN operated the NSFnet regional network NEARnet. Beginning in 1989. the Special Interest Group on Data Communication of the Association for Computing Machinery (ACM SIGCOMM). representative to the computer communications technical committee of the International Federation for Information Processing (IFIP TC6). He is a Fellow of the Institute of Electrical and Electronics Engineers (IEEE).S.
Internet interconnection is fundamentally different from interconnection in the traditional. global. End users see the seamless. institutional. The Digital Handshake: Connecting Internet Backbones (see Sources and References). The unregulated marketdriven model on which today’s global interconnection arrangements are based has developed over the past three decades in parallel with the development of the Internet itself. for reasons that are intrinsic to the architecture of the Internet and how it has evolved. the nature of Internet interconnection agreements. and the number and variety of 1 In The Evolution of the U. Interconnection enables the Internet as a whole to be ubiquitously fullyconnected. and governmental entities. behind the scenes lie many individual networks. around the block or around the world. ISP Interconnection1 allows traffic originating at a source connected to one ISP’s network to reach a destination connected to another ISP’s network. As a result. All Rights Reserved www.net . the range of choices that are available to participants. Interconnection is the glue that holds the Internet together. Copyright © 2005 Interisle Consulting Group.S. LLC. and studies by a wide variety of public and private organizations2 have repeatedly concluded that it represents the most effective and efficient way to provide ubiquitous public Internet connectivity without being either anti-competitive or inequitable. Internet Peering Ecosystem (see Sources and References).ISP Peering and Interconnection Page 3 1 Introduction Internet Service Providers (ISPs) connect their networks to each other in order to exchange traffic between their customers and the customers of other ISPs. Bill Norton coins the roughly equivalent term Internet Peering Ecosystem: “a community of loosely affiliated network operators that interact and interconnect their networks in various business relationships. owned and operated by many different corporate.” 2 An excellent summary of the case that these studies collectively make for the unnecessity of ISP interconnection regulation is contained in FCC Office of Plans and Policy (now Office of Strategic Planning and Policy Analysis) Working Paper 32. circuit-switched telephony world. the economics of interconnection. ubiquitous communication medium known as the Internet. joined to each other by interconnection arrangements.interisle. despite the fact that no single network operator could possibly provide Internet access in every part of the world.
All Rights Reserved . at which two or more ISPs make technical and administrative arrangements to exchange traffic. Early efforts to connect computers to each other led to “networks” based on a variety of different proprietary communications technology and protocols. Department of Defense funded several projects to build homogeneous networks before Bob Taylor. which enables networks based on different telecommunication technologies and protocols to exchange data. In the 1950s and 1960s. terminals. who took 3 The standard Internet Protocol is the “IP” in the familiar acronym “TCP/IP. “computer communication” meant connecting I/O and storage peripherals (such as card readers.interisle. The Information Processing Techniques Office (IPTO) of the Advanced Research Projects Agency (ARPA) of the U.net Copyright © 2005 Interisle Consulting Group. before LANs and PCs. and governmental organizations. and printers) to resolutely self-contained mainframe computers. and interconnection. it is a management feature necessitated by the fact that the ownership and administration of the physical components of the Internet infrastructure are distributed among many different commercial.1 Networking Neither internetworking nor interconnection were features of the Internet’s most distant precursors. Thus. 2 The Origins of Interconnection As we observe it today. interconnection takes place at specific public and private exchange points. there is an important distinction between internetworking. 2.S.” www. is the common operating mode throughout the Internet. Today internetworking. ISP interconnection is not an intrinsic technical feature of the Internet. noncommercial. LLC. which enables the owners and operators of different networks to collaborate as business entities in the provision of seamless end-to-end Internet connectivity to all of their individual customers. using the standard Internet Protocol3.ISP Peering and Interconnection Page 4 participants in the market are different from their counterparts in the telephony world.
4 In the early to mid-1960s. LLC. When there were just a few of these homogeneous networks. Kuo. All three concluded that the strongest communication system would be a distributed network of computers with (a) redundant links. (d) variable routing of packets depending on the availability of links and nodes.net . in Leonard Kleinrock’s work at UCLA in Los Angeles. and Binder. culminating in the July 1968 ARPA request for proposals for the interconnection of four ARPA research sites into what would be called the ARPAnet. but as the number of networks grew. All Rights Reserved www. it was possible to exchange information between them by building a translator. and in Donald Davies’s work at the National Physical Laboratory in Teddington. which originated in at least three distinct places during 1961-1965: in Paul Baran’s work at the RAND corporation in Santa Monica. CA. UK. (c) messages broken into equal-size packets.2 Internetworking It is remarkable to realize that the very earliest thinking4 about what a “network of networks”—an “internet”—should be embraced the three key concepts that underlie the architecture of today’s global Internet: 1) The concept of packet switching. and (e) automatic reconfiguration of routing tables after the loss of a link or node.interisle. 2. which originated in the multi-access channels of ALOHAnet at the University of Hawaii (by Abramson. through 1970)5. 2) The concept of best-effort service. Copyright © 2005 Interisle Consulting Group. (b) no central control. it was Bob Metcalfe’s brilliant leap from ALOHA to Ethernet (at PARC in 1973) that brought the concept of stochastic (non-deterministic) channel access into the networking mainstream. and the idea of contention for channels was widely familiar in the radio context. 5 ALOHAnet was a radio network. the n-squared scaling inefficiency of pair-wise translation led to the idea of “internetworking”—creating a network of networks. recruited Larry Roberts to design a “distributed communications network” which laid the foundation for the ARPAnet. CA.ISP Peering and Interconnection Page 5 over as IPTO head in 1966.
Other packet networks.S.net . All Rights Reserved www. whether foreseen or unforeseen. later Cyclades (Louis Pouzin). The first papers describing “packet network interconnection” were published by Vint Cerf and Bob Kahn in 1973. were being developed at the same time7.S.interisle. 2. and the X. and the IMPs communicated with each other over 56Kb/sec. in 1969. Initially the Packet Radio Network (Bob Kahn) and Packet Satellite Network (Larry Roberts).ISP Peering and Interconnection Page 6 3) The concept of application independence—that the network should be adaptable to any purpose. Government agencies to 6 7 Dubbed “1822. The tradition of self-management by the people designing. LLC. Copyright © 2005 Interisle Consulting Group. and Transpac. using an ARPAnet-specific “host-to-host protocol” that was referred to as the Network Control Program (NCP). and has carried through to the governance structures that oversee the Internet today—particularly the Internet Engineering Task Force (IETF). and operating the network was established at the very first NWG meeting. From the beginning the ARPAnet was managed by an informal and mostly selfselected group of engineers and managers who began meeting as the Network Working Group (NWG) in the summer of 1968. installing. PSS.3 Interconnection The clearly evident usefulness of the ARPAnet to the U.25-based networks that became Telenet. based on other protocols. rather than tailored specifically for a single application (as the public switched telephone network had been purpose-built for the single application of analog voice communication). Defense Department contractors who were permitted to use it led other U.” after the serial number of the BBN report that described it. At the outset. the ARPAnet began using IP in 1977. the ARPAnet was not an “internet”—each of its four computer hosts was connected to an Interface Message Processor (IMP) by a proprietary serial link and protocol6. lines leased from the telephone company. Datapac.
3. Eventually. These interconnection points were managed by two informal groups of engineers and managers.S. Department of Energy (DoE) built MFENet for its researchers in Magnetic Fusion Energy. 9 Led by Rick Adrion. NASA Space Physicists followed with SPAN. ARPA.ISP Peering and Interconnection Page 7 develop similar networks8. based on the Unix UUCP communication protocols. DoE's High Energy Physicists responded by building HEPNet.interisle. CA (FIX-West). the Federal Networking Council (for administrative matters) and the Federal Engineering Planning Group (for technical matters). All Rights Reserved . LLC.net Copyright © 2005 Interisle Consulting Group. and NSF: the Federal Internet Exchanges at the University of Maryland (FIX-East) and NASA’s Ames Research Center in Mountain View. which linked academic mainframe computers.1 Federal Internet Exchanges The practical awkwardness of operating multiple non-communicating networks eventually led to the establishment of two exchange points for federally-funded networks operated by NASA. www. these early networks were restricted to closed communities defined by an “acceptable use policy” (AUP) that specified the uses to which the networks could legitimately be put (e.. and initially they did not. and Larry Landweber. AT&T’s wide dissemination of the Unix operating system encouraged the creation of USENET. DoE. The interconnection regime was designed primarily to isolate the regions within the emerging technologically uniform IP “internet” that were subject to different acceptable use policies. David Farber. disgruntled computer scientists9 who could not connect to one of the government-controlled networks established CSNET for the (academic and industrial) computer science community. and in 1981 Ira Fuchs and Greydon Freeman developed BITNET. With the exception of BITNET and USENET.g. The prevalence of highly restrictive AUPs provided little incentive for the networks to interconnect. 8 The U. 2. to conduct research funded by a particular government agency).
10 by Larry Landweber (University of Wisconsin).25 networks. It provided TCP/IP interfaces with USENET.ISP Peering and Interconnection Page 8 2. and commercial X. we would say that the customers of one ISP (ARPAnet) could not communicate with the customers of another ISP (CSNet). financial.interisle. In modern terms. David Farber (University of Delaware).2 CSNet and NSFnet The USENET. The purpose of CSNET was to link all of the computer science departments and industry labs engaged in computing research.net . The turning point that eventually brought them all together was the CSNET project. and the X.25 networks could not be connected to the ARPAnet (or to the other federal networks that were interconnected at the FIXes) because of the government policy limiting ARPAnet to government agencies and their contractors. the bureaucratic complexity of which daunted even the most fervent advocates of interconnection—until the CSNet managers came up with the idea that we now call “peering.3. and a host of other issues. A landmark agreement between NSF and ARPA allowed NSF grantees and affiliated industry research labs access to ARPAnet. Copyright © 2005 Interisle Consulting Group. as long as no commercial traffic flowed through ARPAnet. This agreement was the turning point at which the evolution of commercial network interconnection began. LLC. and Peter Denning (Purdue University). because no mechanism existed to reconcile the different Acceptable Use Policies of the two networks. which was created in 198110 under a grant from the National Science Foundation . and those who could not (connecting instead to CSNet).” or interconnection without explicit accounting or settlement. and established nameserver databases to enable any computing researcher to locate any other. This disconnect persisted as both sides assumed that any agreement to exchange traffic would necessarily involve the settlement of administrative. Anthony Hearn (Rand Corporation). BITNET. All Rights Reserved www. The development of CSNet highlighted the disconnect between the “haves” and the “have nots” in the computing research community—between those who could find a government agency or contractor to sponsor their connection to the ARPAnet. BITNET. contractual.
the NSFnet had become the backbone of the modern Internet. it established four geographically distributed. Hans-Werner Braun. Under the terms established by the NFS. and in 1996.>> As the original NAPs (also referred to as Metropolitan Area Exchanges. and MFS.3. By 1990. privately owned and operated Network Access Points (NAPs).interisle. using published pricing and established technical operating specifications. 2. a NAP operator was required to provide and operate an interconnection facility on a nondiscriminatory basis. NSF also commissioned the development11 of a deliberate architecture of backbones and regional networks that introduced the idea of hierarchy into the Internet topology. as the National Science Foundation began the transition to private ownership and management of the NSFnet infrastructure.3 Network Access Points In 1993. Bob Aiken. All Rights Reserved . LLC. a high-speed backbone connecting its supercomputing research centers. and Steve Wolff. www.where any interested party could co-locate equipment and connect its network to the NFSnet backbone or to other networks.net Copyright © 2005 Interisle Consulting Group. These NAPs were the first commercial Internet exchange points.3. the potential complexity of hundreds or thousands of ad-hoc bilateral arrangements pointed to the need for 11 By Peter Ford. which extended the commercial Internet exchange model yet further. NSF handed over its management to commercial Internet Service Providers (ISPs). using routers. operated by Sprint. 2. Ameritech.4 Commercial Internet Exchange Points As the number and diversity of NAPs increased.ISP Peering and Interconnection Page 9 NSF went on to sponsor NSFnet. many network providers began creating their own private NAPs. or MAEs) became increasingly congested. <<CIX in San Diego was the first to engineer the interconnection at the IP layer. Pacific Bell.
The economic incentives and tradeoffs that are so richly diverse in today’s Internet (see section 3. and clearing and settlement of charges between parties). led many ISPs to explore direct interconnection of their networks with those of other ISPs. operating in every business from high-capacity backbone traffic down to dial-up lines. and operating philosophies. ”exchange points.a. ISPs. a. All Rights Reserved www. in turn. operational support of routing equipment. NAPs.” which provided a uniform set of technical and administrative services (e.2) began to develop as soon as commercial ISPs recognized that their interconnection arrangements could be a source of competitive advantage. This interconnection hierarchy did not. ISPs served end users by providing connectivity between them and the rest of the Internet. serving the same or different markets. traffic metering. End users connected to ISPs by placing calls over the public telephone network to modem banks operated by the ISPs. Internet Service Providers.net .interisle. and backbone providers were the wholesalers of the emerging commercial Internet.g. particularly for destinations that would be several “hops” away using a public exchange. were the retailers. correspond to a strict hierarchy of ISPs and backbone providers as business entities. or via leased circuits of higher capacity. Any ISP could connect to one of the public Internet exchange points.k. however. The Copyright © 2005 Interisle Consulting Group. but the opportunity to achieve better performance. Others specialized in providing one form or another of connectivity to one or more specific markets. LLC. These exchanges provided a framework that allowed multiple providers of different sizes. billing. neutral policy framework within which providers could implement mutually beneficial cost-sharing interconnection agreements. to interconnect in ways appropriate to each. scopes.5 Internet Service Providers If exchange points. traffic routing based on sophisticated criteria.3. 2. It was at this juncture that there began to emerge a large number of privately operated NAPs. Some providers were vertically integrated. interconnection.ISP Peering and Interconnection Page 10 an overarching. connected to regional or backbone networks at NAPs or exchange points. or ISPs.
see. for example. LLC. ensured that the Internet as a whole would always be fully interconnected. could be an order of magnitude lower than the cost of a direct connection . which meant that even where a link existed between. 13 With the notable exception of the UK. Until relatively recently. the cost of connecting through an exchange point on the east coast of the U. it was common for Internet users in Taiwan. Edward J. A corollary to many of these studies is the observation that the selfhealing properties of the Internet architecture guarantee that the Internet as a whole will remain fully interconnected even if most of the direct connections between individual ISPs were removed.3. completely unfounded. and the variety of different ways in which the rapidly expanding Internet services market drove the development of creative combinations of public and private ISP interconnection. Because North American Internet users were overwhelmingly the sources. in today’s Internet. and from the much more favorable (largely unregulated) economics of Internet telecommunications in North America than in most other countries.12 2. Germany and France. for example. of 12 The topology of Internet interconnection has emerged over the past decade as an important factor in studies of Internet resilience and survivability. Copyright © 2005 Interisle Consulting Group. to communicate with other Internet users in Japan or Singapore over a path that led through an exchange point in California (MAE-West). All Rights Reserved www.ISP Peering and Interconnection Page 11 growing number of ISPs.S. the interconnection arrangements between North American ISPs and networks in other countries initially were biased strongly in favor of the North American ISPs. whether or not any particular pair of ISPs installed an explicit public or private interconnection. for example. Malecki’s “The Economic Geography of the Internet’s Infrastructure” (Sources and References). This imbalance arose both from the early absence of an exchange infrastructure in other parts of the world. which was connected to the ARPAnet much earlier than any other non-North American country. with the Asian network operators paying the full cost of the trans-Pacific links. in North America than in other parts of the world13.net . the customers of every ISP could communicate with the customers of every other ISP. rather than the consumers. The fear of Internet “balkanization” as a result of large ISPs refusing to interconnect with smaller ISPs is.6 Internet Exchange Points outside of North America Because the Internet developed earlier. and more rapidly.interisle.
60 of the 92 listed exchanges are located outside of North America. 14 A current list of Internet exchange points is maintained at https://www. that semantically span multiple ISPs.peeringdb. All Rights Reserved www. However. owned and operated by a literally uncountable array of providers: private and public.net . ranging from individual home users’ dial-up connections to globe-spanning networks of massive capacity. Market forces now drive ISP interconnection decisions in many other countries as effectively as they do in North America. 3 Interconnection in Today’s Internet The fabric of today’s Internet is stitched together from a huge variety of links and individual networks. ISPs in non-North American countries were determined to correct this imbalance by forcing North American ISPs to subsidize the cost of inter-regional links. all of which require cooperation and collaboration among multiple ISPs: 1) secure exchange of interdomain routing information.php. at the time of this report. particularly “quality of service” (QoS) dependent services. ISP interconnection. multi-ISP attack that have yet to be seen). 2) the provision of services. they had very little incentive to defray the cost of connections to other countries. as dozens of viable regional Internet exchanges have emerged outside of North America14. administrative. and legal perspective. Interconnection is goverened by a wide variety of bilateral and multi-party arrangements. local and global. operational.ISP Peering and Interconnection Page 12 Internet content.interisle. As recently as five years ago. large and small. special-purpose and generalist. LLC. the pressure to regulate international ISP interconnection in favor of non-North American ISPs has substantially evaporated. financial.com/private/exchange_list. from a technical. Copyright © 2005 Interisle Consulting Group. 3) detection of and response to denial of service attacks (and possibly other forms of distributed. involves a number of issues that go beyond simply splicing together traffic streams.
point-to-point leased circuits.. the centralized and heavily-managed PSTN circuit switching—and in the policies and economics that govern interconnection arrangements. for example. All Rights Reserved www. broad interoperability.ISP Peering and Interconnection Page 13 4) control of spam. x. adaptive. and compelling.interisle. their ability to create and maintain technical. SNA).g.g.25. frame relay). and governance policies and practices that encourage high-quality engineering. The Internet approach is driven by self-organizing. What has given vitality to the Internet approach isn’t simply that the current approach meets the needs of the current environment. in the more familiar public switched telephone network (PSTN). self-regulating groups that have proved. monolithic. end-to-end ownership of the transport infrastructure by a single provider). LLC. it is that the current approach relies on underlying processes that are flexible. and continued Copyright © 2005 Interisle Consulting Group. time and again.1 Interconnection Architecture 3.1 The Internet Approach What can loosely be termed “the Internet approach” has become the dominant paradigm in networking. emergency warning (cf.g.1. ISP interconnection operates very differently in the Internet than its counterpart does. 3. and 5) enforcement of national public policy mandates (universal service. The Internet approach has displaced: • • • other technologies (e. architectural.g..net . wiretap. The differences are observable both in the basic architecture of interconnection—the decentralized and self-organizing “Internet approach” to packet switching vs. and other intrinsically multi-ISP exploits.). regulated monopolies or governmentowned PTTs). etc. other business models (e. other architectures (e. phishing. business. and • other forms of governance (e. the recent IETF proposal).
and no dues. 3. to be effective at establishing workable standards and highly adaptive to the rapid growth and change that have occurred within the Internet. administratively. and public policy. within the Internet Society. the operators of interconnected networks have met both informally and formally to share technical information and coordinate operating principles and practices. with a charter to promote and coordinate the interconnection of networks within North America 15 Tao of the IETF—A Novice's Guide to the Internet Engineering Task Force. All Rights Reserved www. operation.interisle. The IETF is unusual in that it exists as a collection of happenings. The IETF is: “…a loosely self-organized group of people who contribute to the engineering and evolution of Internet technologies. Copyright © 2005 Interisle Consulting Group. and this fact has often been cited as the key to the Internet’s phenomenal success. Almost every aspect of Internet technical development. coordinated by the Internet Architecture Board (IAB) and housed.1.1. It is the principal body engaged in the development of new Internet standard specifications.”15 The “loosely self-organized” IETF and related organizations have proven.ISP Peering and Interconnection Page 14 creation of value.1. no members.1. called the “North American Network Operators Group” (NANOG). self-regulating structure. (see Sources and References). and governance is managed by a self-organized. LLC. but is not a corporation and has no board of directors. In the 1990s.1 Technical Standards Internet technical standards are developed through the activities of the Internet Engineering Task Force (IETF).2 Operating Principles and Practices Since the earliest days of the Internet. Selfregulation has allowed the Internet to adapt quickly and efficiently to the rapid pace of change and innovation in telecommunications technology. operations. 3. members of the former NFSNET “Regional-techs” meeting formed an expanded group. over a 20 year history. while truly representing global consensus and thereby keeping participants on board.net .
with the technical infrastructure required to cause the names to perform their intended function.interisle.1. such as “coca-cola. constitute one highly visible class of valuable virtual resource in the Internet. Domain names combine aspects of traditional intellectual property (i. In the Internet.ISP Peering and Interconnection Page 15 and to other continents. All Rights Reserved www. LLC. including: • • • • • • • AfNOG—the African Network Operators Group SwiNOG—the Swiss Network Operators Group JANOG—the JApan Network Operators Group FRnOG—the FRench Network Operators Group NZNOG—the New Zealand Network Operators Group SANOG—the South Asian Network Operators Group PACNOG—the Pacific Network Operators Group 3. The fact that North American Internet users enjoy transparent access to the entire Internet. or “lightbulbs.com”.3 Resource Allocation One of the most important governance functions in any domain is promoting an efficient exchange of value and allocation of resources. and virtual resources.com”. tangible infrastructure such as communications links and switching facilities.net . trademarks and service marks).1. Another measure of the effectiveness of NANOG is that other regions of the world have replicated the approach and have developed or are developing similar groups. Domain names. serving as an operational forum for the coordination and dissemination of technical information related to backbone and enterprise networking technologies and operational practices. regardless of the ISP to which they happen to be locally connected.e. testifies to the success of the self-regulating NANOG model. NANOG has been highly effective in allowing ISPs and backbone providers to coordinate their activities to efficiently provide seamless service to a broad market. there are two key types of resources in play: Physical. Copyright © 2005 Interisle Consulting Group.
From its own description: “As a private-public partnership.1. but there still needs to be a mechanism for allocating the addresses. there are only a fixed number of addresses available. to promoting competition. in which routers connected by communication links of various kinds compute routes through the Internet based on information they have received from hosts (end users) on any networks to which they are directly connected and from other routers. is an international. unencumbered by policy or economics—ISP interconnection is no more complicated (or controversial) than simple internetworking. ICANN is dedicated to preserving the operational stability of the Internet. the IETF can establish an addressing scheme (and has done so).net . to achieving broad representation of global Internet communities. Under any addressing scheme. consensus-based processes. ICANN. an essential function for the proper operation of most Internet services. and to developing policy appropriate to its mission through bottom-up. LLC. the numerical address by which each computer connected to the Internet is uniquely addressable.” 3.2 Interconnection Arrangements From a purely technical standpoint—that is. through a highly decentralized. the operators groups can establish a plan for deploying it.interisle. broadly participatory organization responsible for overseeing: • The allocation of domain names. an Internet exchange point is a physical place (typically a room in a building) in which Internet routers Copyright © 2005 Interisle Consulting Group. In its simplest form. marketdriven process • • The allocation of IP addresses The operation of the mechanism (also highly decentralized) whereby names are resolved to addresses. the Internet Corporation for Assigned Names and Numbers. All Rights Reserved www.ISP Peering and Interconnection Page 16 Another important virtual resource is the IP Address.
or to a direct connection to another ISP. it can quickly re-route traffic through some other exchange point. if an ISP’s link to one exchange point (or the exchange point itself) fails. In the Internet. All Rights Reserved www.16 A similar arrangement obtains when two ISPs decide to connect their networks directly to each other. and then over B’s network.ISP Peering and Interconnection Page 17 are installed. When multiple carriers are involved. In today’s richly-interconnected Internet. using routing protocols such as the Border Gateway Protocol (BGP).interisle. this process is much less dynamic (and much less robust) in the PSTN. The most important difference between this model of Internet interconnection and the circuit-switching model of the PSTN is that the Internet dynamically selforganizes to find paths from one point to another without explicit preconfiguration or setup. of course. Copyright © 2005 Interisle Consulting Group. and decide to use the exchange point to reach those users. without loss of data or manual re-configuration. 17 Some ISPs will refuse to carry traffic that originated with another ISP that has been “blacklisted” for sponsoring spam or phishing attacks. and connect them to the exchange point routers. there 16 In practice. LLC. for example. but this is not the classic “holdup” scenario that can arise from simple refusal to interconnect in the PSTN world. Traffic from users on A’s network to users on B’s network would flow over A’s network as far as the exchange point. The ISP routers and the exchange point routers exchange information about where different groups of Internet hosts—identified by their IP addresses—are located. the possibility that an ISP could find itself unable to connect its customers to some part of the Internet because one or even many other ISPs refused to interconnect with it17 is vanishingly small. the way in which traffic flows are managed at exchange points is much more complicated than in this example. where call re-routing depends on the prior negotiation and provisioning not only of alternative circuits but also of switch ports and switching fabric capacity. that a group of Internet users who are customers of ISP B can be reached through an exchange point to which both A and B are connected.net . rather than at a third-party exchange point. ISPs that want to use the exchange point to connect to other ISPs run one or more links from their own routers to the exchange point. ISP A might learn.
particularly when those parties are large ISPs. and other public policy instruments that apply to the jurisdiction in which the interconnection takes place.interisle.com/uunet/peering/>). regulations.” Interconnection agreements are often tailored very carefully and minutely to the specific circumstances of the parties involved. 18 Representative examples of large.1 Interconnection Agreements At its most basic.mci. participatory market. 3. and the architecture of the Internet ensures that traffic will flow end-to-end regardless of where an ISP is connected.php>). or (third example).2. Interconnection economics refers to the way in which interconnecting ISPs assess and manipulate the economic variables that determine the viability of interconnection as a business proposition. and (b) external mandates arising from laws. While it was once the case that networks were quite private about their peering policies. public and private. 3.2 Interconnection Policy and Economics Interconnection policy refers to the way in which the technical and contractual arrangements that ISPs negotiate with each other to interconnect directly or at public or private peering points (Internet exchanges) are influenced by (a) the business objectives and policies of each of the parties.ISP Peering and Interconnection Page 18 are simply too many available connection points.net/network/peeringpolicy. or some combination of the two. medium. or pay you. increasingly the market has become one in which networks publish their policies openly18.speakeasy. and small networks’ peering policies are the MCI UUNet policy (at <http://global. LLC. an interconnection agreement says “You carry some traffic for me.net . Aside from the publicly available policies providing a useful look into the economics of peering. the Speakeasy policy (at <http://www. in return for which I’ll do something—either carry traffic for you. All Rights Reserved www. Copyright © 2005 Interisle Consulting Group. the fact that they have become increasingly public speaks to an increasingly transparent.
ISP Peering and Interconnection Page 19 The current environment is one in which a heterogeneous mix of network providers—large and small. Copyright © 2005 Interisle Consulting Group. As with bilateral settlements. Each accepts traffic destined for its own customers and originating within the other’s network. it is possible to consider them all as variations on a common theme (see Table 1) : • Networks “A” and “B” connect to each other. 4) Multilateral exchanges. • Each accepts traffic destined for its own customers (peering).interisle. All Rights Reserved www. The provider charges a fee for carrying the other network’s traffic. the provider. two operators each accept traffic from the other. national. and/or for the customers of other networks to which it is in turn connected (transit). traffic is routed to other operators’ networks via equipment provided by the exchange and according to rules administered by the exchange. LLC. local. But no charge is made. accepts traffic originating within the other’s network.net . destined not only for its own customers but for third party networks with whom the provider in turn connects. the net settlement amount would be zero) 2) Sender Keep All. a (usually commercial) facility carrying connections from multiple operators. There. Each charges for the volume of traffic it accepts from the other. public and private—connect to each others’ networks under a variety of arrangements. Neither network delivers traffic to third parties on behalf of the other. One operator. ( It follows that if the value of traffic in both directions is equal. for delivery to the accepting network’s customers. Two operators interconnect. When all the different network interconnection arrangements are considered. which adhere to one of four basic models: 1) Bilateral settlements. An operator connects to an exchange. 3) Transit. and global. possibly through a thirdparty exchange point or other intermediary. the operator settles through the exchange for traffic that others carry on its behalf and that it carries on behalf of others.
or preferentially choose interconnection partners where the peering relationship gives access to a desired technology. • Technical factors: networks may require certain technical standards. and in the case of a paid arrangement (bilateral settlement or transit). or non-overlapping. Copyright © 2005 Interisle Consulting Group. possibly through a third party intermediary). “A” accepts traffic for: Its own customers only Other networks to whom it connects “B” accepts traffic for: Its own customers only Other networks to whom it connects Other Financial settlement None Cash Through an Exchange Multi-Party Networks connect: Directly Nature of Agreement Bilateral Table 1: Any given interconnection arrangement can be characterized by choosing one value from each of the columns above. 19 Two recent studies of peering economics are reported in Economics of Peering and A Business Case for Peering in 2004 (see Sources and References). or it is a multi-party agreement.2 Micro-economics of Interconnection Many economic and business-policy factors affect an individual ISP’s decision to peer or not to peer with another ISP.2.interisle. • The arrangement is either purely bilateral.ISP Peering and Interconnection Page 20 • The arrangement either includes a cash payment made by one network to the other (again. the pricing19 External. such that a peering relationship would be symmetrical. publicly-advertised factors include: • Geographic coverage of the two networks: either overlapping. 3.net . All Rights Reserved www. or it doesn’t. such that a peering relationship would extend each network’s geographic reach. LLC.
European ISPs in one country were connecting to US backbones in order to send traffic back to a neighboring European country. Routing: networks may require specific routing policies and practices. in a perfectly fair market.ISP Peering and Interconnection Page 21 • • • • Operational: networks may require a certain level of operational support. Two arguments against intervention apply here: one addresses the argument itself and the other examines historical outcomes. Because so many idiosyncratic factors affect each interconnection decision.interisle. for example. for example). Additional. At a theoretical level. LLC. it is extremely difficult to analyze the economics of any particular interconnection arrangement using external. others entirely idiosyncratic . idiosyncratic factors apply. the arrangement is made on the basis of a perceived equitable exchange of value between the two interconnecting parties. the implicit assumption that the cost of a link.net . bearing the cost in effect of two transatlantic hops. Size: networks may choose to peer only with similarly sized networks. it would lead to a higher perceived value and price than otherwise. Anticipated traffic volumes. if one network’s specific geography or customer mix or traffic mix dovetails with an important element of the other network’s strategy. objective criteria in order to determine whether or not the market is distorted and the agreement gives either party undue advantage. For example. that certain bilateral relationships between overseas and US-based networks are “unfair” on the grounds that the cost of the transatlantic or transpacific link was borne entirely by the overseas network. In some cases. All Rights Reserved www. where the value of the arrangement to each of the parties is determined by a number of factors. some obvious (direct cash payment. should be borne by the two connected parties in proportion to the volume of traffic they Copyright © 2005 Interisle Consulting Group. In any given case. where as the origination of traffic was split more evenly between the two. The argument has been made in the past. or access to a large user community. cost-effective transit.
it has been observed that the European networks now connect to each other at multiple exchange points within Europe. and not regulatory intervention. that influence the value of interconnection to either party.ISP Peering and Interconnection Page 22 originate. and that anything else is perforce distored.net . connectionless architecture. Does a buyer or a seller have a choice of many parties to deal with? Or is there a monopoly or oligopoly limiting choice? In some sense.“>> Copyright © 2005 Interisle Consulting Group. It was the rational. 3. financial desire to avoid paying transatlantic round-trips to connect to one’s neighbor. it is worth examining the overall characteristics of the market in which these arrangements happen. Models of interconnection economics have been developed by <<citations. as contrasted with the circuit-switched. discussed above.3 Macro-Economics of Interconnection In addition to examining the factors influencing a single interconnection arrangement.2. (Y has a strong incentive not to make the terms of interconnection too onerous for at least some well-connected peers. LLC. including “Internet interconnection and the off-netcost pricing principle”: “The purpose of this article is to develop a framework for modeling the competition among interconnected Internet “backbone operators” or “networks. Just because ISP “X” can’t strike a satisfactory bargain with ISP “Y”. is flawed due to the additional factors other than traffic volume. An essential characterization of a market is its liquidity. does not mean that X’s customers will be unable to reach Y’s customers: X always has the option of buying transit from some third party who is in turn connected to Y. connection-oriented public telephone networks. the overall economic environment in which interconnection agreements are negotiated can be characterized as a free market with a large number of players. at risk of cutting its customers off from regions of the Internet) In addition to the intrinsic choice. All Rights Reserved www. choice is intrinsic to the Internet’s routed.interisle. that led to the emergence of this more effective network topology. On a more pragmatic level.
it is not clear that just because the cash economics of given a peering arrangement do not track the data transport volumes. network performance and business expansion. implies market distortion. or signatures of a distorted. There has. 2005 ISPCON conference. Equinix. and damage to the end consumer. fewer choices. uncompetitive. resulting in the usual effects of reduced competition: higher prices overall. it has been claimed that the barriers to entry in the backbone business have been lowered. in fact. tracking the number of backbone operators and the entry barriers to the backbone business is likely to provide insight into the dynamics of the market. geographic footprints. a slower pace of innovation. been considerable consolidation in the ISP market. This presentation will review pricing trends and the opportunities that are being created for small and regional networks. All Rights Reserved www. It will draw upon specific examples and case studies of ISPs that have leveraged this trend. for example: “Trends in transport pricing over the past six months have created a disruptive change by lowering the barriers for small and regional networks to develop robust national backbones for application delivery. who would be able to form in effect a cartel and disadvantage their competitors. as well as a review of specific products and their price points. The presentation will be technical and geared toward an engineering audience. founder and CTO. it is important to understand what might be the symptoms. Given the idiosyncratic nature of peering decisions.interisle. oligopolistic or monopolistic market.net . Session announcement.”20 It is worth following these predictions to determine their accuracy and applicability. On the other hand.ISP Peering and Interconnection Page 23 It has been suggested that the free market operation of ISP interconnection would be threatened by consolidation and the emergence of a small number of dominant players. peering. 20 Jay Adelson. Recently. LLC. or other obvious criteria. Is it hurting the market? In assessing this question. Copyright © 2005 Interisle Consulting Group.
net . In the Internet. In November 2003. for example. The fourth. as it has to other challenges and changes over the past decades. LLC. In the PSTN.1 Multi-Layer Interconnection Arrangements Today: interoperability and interconnection at the packet level (architecture—the Internet hourglass model). More recently. dealt with ISP interconnection at the level of packet exchange—how IP packets are conveyed across the boundary (physical and administrative) between different ISPs. relating to external attempts to bypass the selforganizing aspects of the Internet approach and impose poicy.” Copyright © 2005 Interisle Consulting Group. which has traditionally been the vehicle for global voice telecommunications. which will force it to adapt. All Rights Reserved www. 4.ISP Peering and Interconnection Page 24 4 New Challenges The Internet approach to interconnection faces several new challenges. are in many senses orthogonal to the operation of the Internet itself. voice is just another application. voice is both the application and the driver for the architecture of every other part of the system. and the architecture of the PSTN is highly application-sensitive. does not observe the same functional layering as do IP networks.interisle. The first three challenges described below are well within the scope of the “Internet approach”: the existing policy mechanisms are well equipped to adapt to these changes. the final report of NRIC VI Focus Group 3 dealt with VoIP: “The recommendations and best practices included in this report address the interoperability of Voice over Internet Protocol (VoIP) and the Public Switched Telephone Network (PSTN). In 2000 the final report of NRIC V Focus Group 4 (see Sources and References). and represent a significant and potentially distorting force. attention has been focused on interoperability at the application layer—VoIP in particular. Because the architecture of the Internet is application-insensitive. This was the focus of NRIC V Focus Group 4. as they have to equally disruptive challenges and changes in the past. and at the IP layer a VoIP packet is indistinguishable from any other data packet. This comes about in part because the PSTN. interoperability between the Internet and the PSTN is freighted with serious difficulties.
national governments).net . operating with a high degree of transparency. 4. the terms of interconnection agreements.2 Balkanization Potential for balkanization of the Internet as backbone ISPs try to differentiate themselves (competitively) by offering services only to their own customers. 4. inclusive organizations.3 Traffic-Load Sensitive Peering Agreements Today: peering agreements are almost uniformly traffic-load insensitive. the economic decisions surrounding a provider’s decision to interconnect. which concluded at the time that balkanization was not likely to occur because of other forces. and the overall market. and representing a broad constituency. or controlling trans-border data flows). policy is established by self-organized.4 Government Intervention Government attempts to control various aspects of the Internet (ITU. 4. LLC. This will affect technical standards.interisle. it may start to look like a tool for the achievement of public policy objectives (for example. 26). Possible emergence of a traffic-sensitive settlement system as ISPs in different situations try to deal economically with the asymmetry inherent in WWW. Copyright © 2005 Interisle Consulting Group. interconnection arrangements are likely to involve multiple layers of the Internet architecture. (see OPP WP 32 pg. All Rights Reserved www. addressing the “Digital Divide” at a national or global level. This was anticipated by studies conducted in the late 1990s. resulting in a network infrastructure that does not provide a uniform. operating practices. As the Internet becomes more of a core enabler of human activities. 5 Conclusions Today's Internet is the way it is because of the way it developed. and others.ISP Peering and Interconnection Page 25 With the rise of VoIP and QoS-dependent applications. universal standard of coverage. operating practices and policies. In every arena: technical standards. resource allocation.
pdf A Competitively Neutral Approach to Network Interconnection. 33. top-down attempts to regulate. should refrain from action.pdf Copyright © 2005 Interisle Consulting Group. http://www.pdf Bill and Keep at the Central Office As the Efficient Interconnection Regime. At present.net . The incentives are well aligned: due to the network effect. December 2000.fcc. given the inherently decentralized native architecture of the Internet and the heterogeneous. to redress perceived inequalities in access or pricing. continued growth of the Internet is a rising tide that lifts all boats. LLC. self-regulating aspects of the Internet are thriving. December 2000. http://www. FCC Office of Plans and Policy Working Paper No. July 1999.fcc. global market in which the Internet operates. and watch for the signatures of a distorted market.gov/Bureaus/OPP/working_papers/oppwp31. 31. which creates a strong bias toward policies that facilitate growth and efficiency. for example). Jason Oxman. http://www.pdf The Digital Handshake: Connecting Internet Backbones. FCC Office of Plans and Policy Working Paper No. All Rights Reserved www. and the policy makers would lose their mandate.gov/Bureaus/OPP/working_papers/oppwp34. Patrick DeGraba. http://www.fcc. are contrary to the fundamental.fcc. Atkinson and Christopher C. either in the service of "improving" the Internet itself. Barnekov. no matter how well intentioned or carefully crafted. 34. If the policy making organizations didn't respond to that imperative. On the other hand.interisle. decentralized nature of the Internet.gov/Bureaus/OPP/working_papers/oppwp33. Michael Kende. Jay M. but until such problems present themselves. or in furtherance of orthogonal policy objectives (solving the “digital divide” problem. FCC Office of Plans and Policy Working Paper No. 32. and run the risk of being destabilizing and harmful. Regulatory policy-makers should remain attuned to the possibility that future developments would lead to a less competitive environment. which is an important source of the Internet's vitality. September 2000.ISP Peering and Interconnection Page 26 This approach is nearly inevitable. the self-organized. 6 Sources and References The FCC and the Unregulation of the Internet. the participants wouldn't follow.gov/Bureaus/OPP/working_papers/oppwp32. FCC Office of Plans and Policy Working Paper No.
edu/~milgrom/publishedarticles/TPRC 1999. <http://www.org/inet99/proceedings/1e/1e_1. 34.com/pdf/whitepapers/PeeringEcosystem. Jean-Jacques Laffont. Steve Gibbard.com/peering/downloads/A Business Case for Peering in 2004. <http://www. Bridger Mitchell.virginia. < http://www.” New York City. 2000. Rajiv Dewan. Geoff Huston.pdf> A Business Case for Peering in 2004. <https://ecc. William B. Bill Woodcock. Presentation to “Gigabit Peering Forum IX.ppt> Competitive Effects of Internet Peering Policies.pdf> Economics of Peering.pdf> The Art of Peering—The Peering Playbook.net/documents/papers/Gibbard-peering-economics.pdf> Copyright © 2005 Interisle Consulting Group.pdf> Economic Trends in Internet Exchanges. William B. Presentation at the 1999 Internet Society Conference (INET 99). RAND Journal of Economics Vol. FCC Network Reliability and Interoperability Council. October 1999.org/pubs/nric5/2B3finalreport.doc> NRIC VI Focus Group 3 Final Report. 1998. All Rights Reserved www. Ingo Vogelsang and Benjamin Compaine (eds). Presentation to NZNOG 2005 conference. Internet interconnection and the off-net-cost pricing principle. William B.pdf> The ISP Survival Guide: Strategies for Running a Competitive ISP. Norton. <http://www. Cambridge: MIT Press (2000): 175-195. 14 September 2004.net . <http://www. 2. September 2004.nric.html> The Evolution of the U. Summer 2003 pp. and Pavan Gundepudi. <http://vjolt. FCC Network Reliability and Interoperability Council.ISP Peering and Interconnection Page 27 Evolution of Internet Infrastructure in the Twenty-First Century: The Role of Private Interconnection Agreements. and Padmanabhan Srinagesh. <http://www. No. May 2002.S. April 2005.nric. University of Rochester. Rob Frieden.student. Norton. NRIC V Focus Group 4 Final Report.equinix.net/info/wp20020625. Norton. Geoff Huston. June 1999. Virginia Journal of Law and Technology. LLC. Appendix B: Service Provider Interconnection for Internet Protocol Best Effort Service. Internet Peering Ecosystem. 1998. Scott Marcus. 3 February 2005. February 2005. and Jean Tirole.stanford.net/resources/papers/asia-pac-ix-update/asia-pac-ixupdate-v11.org/pubs/nric5/2B4appendixb. Paul Milgrom. Patrick Rey. Wiley Computer Publishing.xchangepoint.pch. November 2003. <http://www. Marshall Friemer. November 2003. <http://www.htm > Without Public Peer: The Potential Regulatory and Universal Service Consequences of Internet Balkanization.internet peering. September 2000.interisle. Reprinted from The Internet Upheaval.isoc.pch. 370–390. Fall 1998. Interconnection. Peering and Financial Settlements in the Internet.equinix.edu/graphics/vol3/vol3_art8.
Netheads vs. 1997. McKnight and Joseph P.tmdenton.net . < http://www.interisle.ISP Peering and Interconnection Page 28 Internet Economics. <http://www.org/tao> The Economic Geography of the Internet’s Infrastructure. LLC. May 1999. October 2002.clarku.ietf. Susan Harris and Paul Hoffman. MIT Press. <http://edu.edu/econgeography/2002_04. October 2004.html> Copyright © 2005 Interisle Consulting Group. All Rights Reserved www. Lee W. Bellheads: Research into Emerging Policy Issues in the Development and Deployment of Internet Protocols. Timothy Denton.com/pub/bellheads. Bailey (eds.). Edward J. Malecki.pdf> Tao of the IETF—A Novice's Guide to the Internet Engineering Task Force.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.